Upsell Your Investors
When Anna Kats came on the Den looking for an investment in her snack business, she already knew what kind of deal she wanted. There was one particular Dragon she had her eye on, and what the terms of that deal would have to include.
Tasty Cheese manufactures healthy snacks from cottage cheese and chocolate, something Anna found to have mass appeal (though Arlene Dickinson didn’t seem to care for the snack). Her past efforts had made her business profitable, but she was looking to expand. She asked for $150,000 for a 20% stake in the business, which, considering the business made no money annually if it paid her a salary, was a fairly aggressive valuation.
Naturally, the dragons were reluctant to give her the valuation she asked for, and one by one they bowed out of the deal.
Except for Jim Treliving, owner of Boston Pizza.
Jim stepped up with an offer, though at a lower valuation than Anna had been looking for. Knowing that she was limited in negotiation room in terms of price, she turned the tables on Jim, asking for an additional feature in the deal. She asked that the product be sold in all Boston Pizza locations, something which would provide immense value to her brand.
While Jim did not promise the result, he did commit himself to looking seriously at that option, and the deal closed.
What this teaches about negotiation is that even when someone appears to be holding all the cards, there are still options. There are factors that can be negotiated that may not affect the price, but will impact the value of the deal to each of the participants. A good salesperson knows how to find those aspects of a deal and play with them to their advantage.